FG, states, LGs share N1.534trn in 3rd quarter of 2016, says NEITI

By Wahab Akanji, Abuja
All the three tiers of government in the country shared about N1.534 trillion in the third quarter of 2016, the Nigeria Extractive Industries Transparency Initiative (NEITI), stated on Tuesday in Abuja.
A statement by Dr Orji Ogbonnaya Orji, Director of Communication, NEITI, stated that the amount was the highest disbursement so far in 2016.
It is, however, 19 per cent lower than the third quarter of 2015.
It added that the analysis of allocations to the three tiers in the third quarter of 2016 presented a mixed picture.
It stated that the figure for the third quarter of 2016 was a major improvement over what was shared in each of the first and second quarters of 2016.
It added that yet the figure was still a significant dip when compared to the amount shared in the third quarter of 2015.
The statement indicated that government allocations were improving even when the 2016 figures still lagged behind the corresponding ones for 2015.
“These are some of the highlights of the second issue of the NEITI quarterly review, which shows that the Federal Government, states and local governments got a total of N1.534 trillion as allocations from the Federation Account Allocation Committee (FAAC) for July, August and September 2016.
“Though the figure for the third quarter of 2016 represents 18.9 per cent decline against the N1.89 trillion shared in the third quarter of 2015.
“The picture is not all gloomy, as the disbursement from FAAC in the third quarter of 2016 was a 35 per cent increase on the N1.132 trillion shared in the first quarter of 2016 and a 74 per cent rise on the N881.65 billion shared in the second quarter of 2016.”
“A breakdown of the allocations for the third quarter of 2016 shows that the Federal Government received N697.9 billion; the states got N512.66 billion while local governments collected N324.31 billion.
It added that major spike was in July, when three tiers of government shared N546.62 billion as against N304.91 billion shared in June, an increase of 79 per cent.
The statement stated that July trajectory was not sustained as revenues to the three tiers of government dipped to N486.02 billion in August but increased marginally to N502.23 billion in September, “a dip of 11 per cent and 8.12 per cent respectively on the July figure”.
“Nevertheless, a different picture of dwindling allocations emerges when the FAAC disbursements for the third quarter of 2016 are compared to those of the third quarter of 2015.
“ The Federal Government receipt in the third quarter of 2016 was N129.9 billion less than what it received in the corresponding period in 2015, while the states and the local government areas received N72.1 billion and N48.5 billion less respectively.”
However, a closer review of non-oil revenue disbursements to the three tiers of government for the three quarters of 2016 showed a marginal increase over the same period in 2015, the statement stated.
It added that total disbursement for VAT to three tiers of government between January and September was N601.53 billion, a meagre 0.10 per cent higher than N600.95 billion disbursed for the corresponding period in 2015.
It noted that the review of the VAT disbursements showed that, in line with VAT sharing formula, states received the lion’s share of N288.72 billion in 2016 as against the N288.44 billion of 2015.
It stated that this was followed by local governments which received N202.13 billion in 2016 as against the N201.90 billion of 2015.
The NEITI analysis stated that Federal Government got only N86.64 billion in 2016 as against the N86.53 billion of 2015.
According to the statement, a comparison between the states’ 2016 budgets and total FAAC disbursements for the three quarters of 2016 showed that they have received far less than expected so far in 2016.
It stated that most states depended on FAAC allocations to fund their annual budgets.
NEITI observed that lower monthly disbursements was likely to negatively impact on budget implementation of most states of the federation.
It stated that the states also had revenue inflows from Internally Generated Revenues (IGR).
The statement contended it was highly unlikely that IGR would be sufficient to offset the huge gap between expenditure and revenue in many states, with exception of three – Lagos, Rivers and Delta.
“The dwindling revenue from the petroleum sector, which led to substantially lower disbursements from the Federation Account, will limit the ability of states to effectively execute their budgets.’’